DILIP BHABUTMAL SOLANKI, MUMBAI V. DCIT CEN CIR 12, MUMBAI

ITA 9095/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3501 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS RUPINDER BRAR
• Assessee Lawyers: M B SANGHVI
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 9095 /MUM/2010 ASSESSMENT YEAR: 2008-09 DILIP BHABUTMAL SOLANKI 39, CHAMPA GULLY, PREMCHAND BUILDING, MUMBAI 400 002 PAN: AAJPS 2061 E VS. DCIT CEN CIR 12 8 TH FLOOR OLD CGO BUILDING 101 M.K. MARG MUMBAI 400020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.B. SANGHVI RESPONDENT BY : MRS. RUPINDER BRAR DATE OF HEARING : 08.05.2013 DATE OF PRONOUNCEMENT : 19.06.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER OF THE LD.CIT(A) -37, MUMBAI DATED 01.11.2010 CONFIRMING THE PENALTY LEVI ED BY THE AO U/S 271 (1) (C) OF THE INCOME TAX ACT TO THE TUNE OF RS.82,762/- FOR THE A SSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS IN BRIEF ARE THAT THE ASSESSE E, PROPRIETOR OF RIKHBAJI BHABUTMAL & CO WAS ENGAGED IN TEXTILE TRADING. DURING THE COURS E OF SEARCH & SEIZURE ACTION UNDERTAKEN AT HIS RESIDENCE, CERTAIN DIAMOND JEWELL ERY AND SILVER ARTICLES WERE FOUND AS PER PARTICULARS GIVEN BELOW: JEWELLERY FOUND DURING THE SEARCH WEIGHT /CARAT AMOUNT (RS.) JEWELLERY DISCLOSED IN RETURN OF WEALTH UNDISCLOSED JEWELLERY (RS.) DIAMOND JEWELLERY 66.92 GMS 1,88,456 NIL 1,88,456 SILVER JEWELLERY 11510 GMS. @ 12 PER GM 1,38,120 4250 GMS. DISCLOSED IN THE RETURN AS SHOWN 7260 GMS. @ RS.12 PER GM RS.87,120/- ITA NO. 9095 /MUM/2010 DILIP BHABUTMAL SOLANKI ASSESSMENT YEAR: 2008-09 2 IN THE ASSESSMENT FRAMED, AS THE AO DID NOT FIND TH E EXPLANATION OFFERED BY THE ASSESSEE SATISFACTORY REJECTED THE SAME AND ACCORDINGLY HELD THAT THE ASSESSEE HAD MADE UNDISCLOSED INVESTMENT IN ACQUISITION OF DIAMOND JE WELLERY AND SILVER ARTICLES VALUED AT RS.2,75,576 (RS.1,88,456/-+ RS.87,120/-). THE ASSES SEE HAD ACCEPTED THE FINDINGS GIVEN BY THE AO IN THE ASSESSMENT ORDER AND DID NOT PREFE R ANY APPEAL. CONSEQUENTLY, IN THE PENALTY PROCEEDINGS U/S 271(1) (C), A PENALTY OF RS .82,672/- WAS LEVIED BEING 100% OF TAX SOUGHT TO BE EVADED. ON APPEAL, THE LD.CIT(A) C ONFIRMED THE PENALTY IMPOSED BY THE AO. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE I S IN APPEAL BEFORE US. 3. BEFORE US, THE LD.AR HAS STATED THAT THE ASSESSE E HAS NOT CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS O F SUCH INCOME. MERE ADDITION IN ASSESSMENT PROCEEDINGS IS NOT SUFFICIENT TO IMPOSE PENALTY U/S. 271(1) (C). HE HAS FURTHER AVERRED THAT THE ASSESSEE HAS NOT PREFERRED THE APP EAL AGAINST THE ADDITION MADE ON ACCOUNT OF THE UNEXPLAINED INVESTMENT BECAUSE OF TH E SMALLNESS OF THE AMOUNT VIS--VIS JUDICIAL COST OF LITIGATION. ON THE OTHER HAND, THE LD.DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE REVENUES CASE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IT IS OBSERVED THAT WITH REGARD TO THE JEWELLERY FOUND DURING THE COURSE OF SEARCH ACTION, THE ASSESSEE AND HIS FAMILY MEMBERS HAVE FILED THE WEALTH TAX RE TURNS TILL A.Y. 92-93. THEREAFTER, FROM A.Y. 93-94 DISCONTINUED FILING THE WEALTH TAX RETURN AS THE AMOUNT OF WEALTH IN EACH OF PREVIOUS YEARS FROM A.Y. 93-94 ONWARDS IS B ELOW THE TAXABLE LIMIT. THE GOLD ORNAMENTS AND SILVER ARTICLES DISCLOSED IN THE W.T. RETURNS OF A.Y. 91-92 AND 92-93 BY THE ASSESSEE AND HIS FAMILY MEMBERS ARE AS UNDER: GOLD ORNAMENTS SILVER ARTICLES A) SELF 217.700 GMS 0.50 KG B) SULSHA SOLANKI (WIFE) 290.000 GMS 0.75 KG C) DILIP B. SOLANKI HUF 265.000 GMS 1.50 KG D) BHABUTMAL RIKHABAJI HUF 265.000 GMS 1.50 KG TOTAL: 1037.700 GMS 4.25 KG THE PERUSAL OF THE PHOTOCOPIES OF BILLS FOR SURREND ER OF OLD GOLD ORNAMENTS IN EXCHANGE FOR NEW DIAMOND JEWELLERY AND SILVER ARTICLES ENCLO SED IN THE PAPER BOOK REVEALS THAT ITA NO. 9095 /MUM/2010 DILIP BHABUTMAL SOLANKI ASSESSMENT YEAR: 2008-09 3 DURING THE FY 1996-97, THE ASSESSEES WIFE CONVERTE D 105 GMS GOLD ORNAMENTS INTO DIAMOND JEWELLERY CONSISTING OF ONE NOSE PIN, TWO P AIRS OF EAR TOPS, TWO RINGS AND ONE PENDANTS THE ASSESSEE HAS CONVERTED 65 GMS OF GOLD ORNAMENTS INTO SILVER ARTICLES OF AROUND 6.5 KG ON 04.10.96. ASSESSEES WIFE PURCHASE D DIAMOND JEWELLERY AND SILVER UTENSILS WORTH RS.92,147/- IN EXCHANGE OF OLD GOLD ORNAMENTS AND HAS PAID NET AMOUNT OF RS.10,192/- TO RAJRATAN JEWELLERS. THE AMOUNT OF RS .10,192/- HAS BEEN PAID IN CASH AND IS INCLUDED IN WITHDRAWALS AND DEBITED TO CAPITAL A CCOUNT IN THE FY 96-97. THUS, WE FIND THAT THE SAID JEWELLERY IS DISCLOSED BY THE RESPECT IVE PERSONS IN WEALTH TAX RETURNS OF EARLIER YEARS AND THERE IS ONLY CHANGE IN FORM OF J EWELLERY WHICH IS DULY SUPPORTED BY EVIDENCE. UNDER THE CIRCUMSTANCES, WE ARE OF THE VI EW THAT THERE IS NEITHER CONCEALMENT OF INCOME WHATSOEVER NOR FURNISHING OF INACCURATE P ARTICULARS. IN VIEW OF THAT MATTER, THE LOWER AUTHORITIES ARE JUSTIFIED IN LEVYING/CONFIRMI NG THE IMPUGNED PENALTY AND HENCE WE DELETE THE IMPUGNED PENALTY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JUNE, 2013. SD/- SD/- (P.M.JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 19.06.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.